home loan
Financial and Home Loan Brokers in Sydney

By Dave Fleming : 14 October, 2019

Higher interest rates, increasemortgage broker sydneyHigher interest rates, increased fees, less flexibility and fewer options. That’s how borrowers will lose out if the banking Royal Commission’s recommendations around how mortgage brokers are paid are implemented. Here’s how you can have your say!

You may have seen in the news that the banking Royal Commission recently recommended that the cost of using a mortgage broker should be transferred from the banks to the customers.

Now, first things first: it’s business as usual for us.

We’re here to help you and will always do so with your best interests at heart.

However, it’s important to note that if these recommendations are adopted, it would cost customers using a mortgage brokers thousands of extra dollars up-front when buying a home.

On top of this, the imposition of a blanket ban on commissions (starting with the removal of trail commissions from 2020) would significantly lower broker remuneration, kill competition, and drive up the cost of borrowing for millions of Australians.

Mortgage & Finance Association of Australia (MFAA) CEO Mike Felton explains: “The recommendations on brokers represent a massive win for the big banks. The Royal Commission was set up to protect (consumers) from big bank power but has simply entrenched it further”.

“How mortgage brokers can be front and centre of the recommendations is inexplicable. A massive new bank fee added to the cost of buying a home cannot be a good outcome for Australians.”

The stats

Reviews by ASIC and the Productivity Commission have found that brokers drive competition by providing a shopfront for smaller lenders.

In fact, mortgage brokers now originate 59.1% of all mortgages in Australia, and more than half a million home buyers use a broker each year.

“I fail to see how decimating the broker channel, leaving Australians with a handful of lenders to choose from, is good for competition, or good for customers,” adds Mr Felton.

Additionally, over the past three decades brokers have contributed to the fall in net interest margin for banks of over 3% points, according to Deloitte. This saves you $300,000 on a $500,000 30-year home loan (based on an interest rate fall from 7% to 4% pa).

Here are some other interesting stats from the Deloitte Access Economics report and independent research released last month from a survey of 5,800 Australian broker and bank customers:

– 58% of Australian consumers who intend to use a mortgage broker in future would be unwilling to pay a broker fee of any nature.

– Only 3.5% of consumers would be willing to pay a fee of $2,000 or more.

– A mortgage broker earns on average $86,417 before tax.

As the stats indicate, most mortgage brokers are small businesses that would be crippled by the proposed changes – and it would only be the big banks that profited!

How you can help us to continue to support you

Right now there’s an industry-wide grassroots campaign running for everyday Australians to send a message to the government that they don’t want mortgage broking fees transferred onto them.

Here’s what you can do in four easy steps:

1. Take action with your local politician: Contact your Federal MP and let them know how you feel by visiting this site. It takes just a couple of minutes as there’s a pre-populated letter already filled out for you (you can edit it as well).

2. Get others involved: Talk to your family, friends and your customers and ask them to go to the site and contact their Federal MP as well.

3. Sign and share the petition: There is also a petition available at www.brokerbehindyou.com.au – please sign and share the petition to ensure policy makers understand the weight of support behind the channel.

4. Share the campaign: Additional campaign advertising collateral will be made available on the website for you to share and promote on your social media platforms daily over the next few weeks and beyond.

If you’d like any further information on this issue, please don’t hesitate to get in touch. We’d love to discuss it with you!

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

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By Dave Fleming : 14 October, 2019

You might be comfortable paying off your mortgage now, but what if things change? Here are some tips on how to avoid a mortgage stress fracture.

https://www.mastermortgagebrokersydney.com.au - note spelling out how to avoid mortgage stress - stress is spelled in dramatic red lettersPaying off a mortgage is one of the biggest financial challenges you and your family will ever tackle.

And it isn’t easy – mortgage repayments take up about one-quarter of a family’s income on average, according to the Australian Bureau of Statistics’ 2016 Census.

While most families manage, what happens if your circumstances change?

An unexpected redundancy, relationship breakdown, illness or accident can dramatically impact your ability to make your payments and put you in mortgage stress.

But first, what is mortgage stress?

While there isn’t a technical definition for the term, mortgage stress is generally considered to occur when a person or family is spending 30% or more of their income on home loan repayments.

There are also a range of other criteria which would suggest you’re experience mortgage stress.

If you’re paying only the interest on your home loan, borrowing money from family, or having difficulty paying your bills, then you might be experiencing mortgage stress.

I don’t have a problem now, why worry?

It’s unwise to assume your circumstances will never change. An accident or illness can befall a person at any time, and the impact on your finances can be devastating.

An increase in interest rates can also have a significant impact on your mortgage repayments. A simple 0.25% rate hike can increase repayments on the average Australian loan ($375,000) by about $50 a month.

Over the course of a year – and with a potential of further rate hikes – this can really chew into your disposable income.

Ok, so how can I avoid it?

The smart borrower won’t wait for their circumstances to change, they’ll start planning now to make sure they can weather a storm if it hits.

Steps you can take to reduce your risk include:

Step 1: Use a mortgage calculator to see what your repayments would will look like if there was a rate increase. Would you be able to keep up?

Step 2: Review your current income and expenses, and make a new family budget. Use it to track where your money is going and where savings can be made, so you can either pay off your mortgage sooner or get by if things go awry.

Step 3: If you’re worried about your mortgage, or concerned about the impact of a future rate hike, come pay us a visit.

We can talk to you about your situation and help you make a plan to ensure a small problem doesn’t become a big one.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

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By Dave Fleming : 14 October, 2019

They grow up so fast. One minute they’re nagging you for a dollhouse, the next, it’s for help buying a two bedroom unit in an up-and-coming suburb. If you always find it hard to say ‘no’ to your kids, here’s how to say ‘yes’ the right way.

mortgage brokers - man wandering in the desertYou’ve probably heard your children complain about how hard it is to crack into today’s property market.

And smashed-avocado shenanigans aside, they do have a point. It is tougher nowadays.

With the property market constantly on the up-and-up, reaching that 10% to 20% deposit can feel like a mirage for your child.

The good news is that you can help them obtain that slightly out-of-reach home loan by using the equity in your property.

How it works

Banks find it risky to lend to borrowers who have an unstable job or low deposit. But they do allow seemingly more-reliable immediate family members to guarantee a home loan.

Guarantor loans have huge benefits for your children, including:

No deposit required: If guaranteed against a parent’s property equity, your child may be entitled to borrow 100% to 110% of the purchase price of a property. That means no deposit is required. Instead, your child can focus their savings on white goods and repayments.

Discounted interest rates: Guarantor loans can come with reduced interest rates and we can help you secure a great deal.

No Lenders Mortgage Insurance (LMI): Your child will likely not need to get LMI because the equity is usually enough of a guarantee to protect the lender against losses.

Things parents should keep in mind

Sounds great, right? But it’s not entirely without its risks. Here’s what you as a parent need to keep in mind:

Safeguard your credit report: Be sure that you can honour the repayments in case things go awry and your child is unable to pay. You should be positive that they will uphold their end of the bargain, but also prepare for the unexpected.

Financial risk versus emotional benefits: Going guarantor makes you financially responsible if your child defaults on payments. The emotional benefits, however, can outweigh the risk.

Impacts on your borrowing capacity: Future credit providers will take into account the guaranteed loan. They will assess your borrowing capacity based on it, and whether or not you are an active participator in the repayments of your child’s mortgage.

How we can help

We understand that when it comes to your children, it can be near-impossible to take your emotions out of decision making. That’s where we come in.

We can help you calculate whether or not you have the equity to make this work, and assess your child’s financial capabilities to see if they’re in a position to be making repayments.

We’ll also help you understand your legal liability as a guarantor before helping you make the big decision. So give us a call today.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

By Dave Fleming : 14 October, 2019

In a perfect world you select a property to buy, complete with white picket fence, and the settlement goes through on the agreed date without a hitch. But as we all know, we don’t live in a perfect world.

loan broker - hands shaking across a business deskWhen you buy or sell a property you go through a ‘settlement period’, which is the time designated for the buyer to complete payment of the contract before becoming the owner of the home.

Up until the settlement goes through the home is the property of the existing owner.

And with a large home deposit at stake, you’ll want to ensure you choose the right period length.

How much time should I give myself?

Generally, settlement periods are 30, 42, 60 or 90 days.

In NSW a 42 day settlement period is the most common, but in most other places around the country it’s 60 days.

Just because it’s common, however, doesn’t mean it’s the best fit for your situation (or the seller’s).

You see, both the buyer and the seller must agree on the settlement period.

However, you may have competing motivations, so this can be tricky.

Whatever the case, just make sure you allow yourself enough time for conveyancing, bank financing approval, organising the move, undertaking requested repairs for the buyer, and negotiating settlements for your other property interests.

Also, keep in mind that if you buy the property at an auction, there will already be a settlement date indicated in the contract.

If you can’t meet that date, chat to the selling agent before signing on the dotted line to see if another date is agreeable.

You might push for a longer settlement period if:

– If you’re the seller and you’re still looking for a property to purchase
– If you’re a buyer and you haven’t yet sold your own home
– You’re selling and the buyer has requested you repair something
– If you have an upcoming event that you want to deal with first (wedding, big overseas trip, etc)
– Someone is going guarantor on the loan or you’re purchasing through a family trust
– You’re buying off the plan, as the scheme has to be registered with the titles office
– You need to save more money as a buffer (especially if you’re upgrading or will be renovating).

You might push for a shorter settlement period when:

– You’re a seller who has already found another home
– You’re a buyer who has already sold your current home and needs to move quickly
– A holiday period or big event is coming up and you’re keen to move in beforehand
– You’d like to undertake work on the property sooner rather than later
– You need cash flow.

It’s important to get right

One-in-five property settlements in Australia are delayed by about one week so it’s important to give yourself a comfortable buffer.

While each party can request a settlement extension if a delay occurs, that doesn’t mean the other party has to agree.

This is where it gets a little tricky. Each state and territory has different laws, and every contract differs.

Queensland’s laws are probably the most stringent. For example, either the buyer or the seller can terminate the contract, sue for damages, and keep/lose their deposit if the other party is not ready to buy on time.

Other states have a little bit more leeway.

In NSW and Tasmania an extra 14 days can be given, in WA and SA buyers are given three days’ grace before penalty interest applies, and in Victoria a seller can immediately start charging a tardy buyer penalty interest.

Final word

So that’s negotiating a settlement period in a nutshell.

The best news? That’s about as much negotiating as you’ll need to do. Because when it comes to negotiating a loan with a lender, we’ve got you covered.

If you’d like to find out more about our services, get in touch, we’d love to help you out.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

By Dave Fleming : 14 October, 2019

So you’ve found the ideal property and it’s time to source finance? Here’s how to play your cards right and get a great home loan deal sorted before the settlement date.

Mortgage broker- playing cards on a poker tableEducating the kids, wedding planning, plumbing – there are some things in life that are better outsourced to professionals.

Similarly, when you’ve finally found the home of your dreams, and you need to keep ahead of the avalanche of tasks that follow, using the services of a mortgage broker can make the process a lot less overwhelming.

Your three choices

Basically, there are three ways you can go about getting your loan. You can go straight to your bank, you can look for the best deal yourself, or you can seek the help of a mortgage broker.

However, as buying a home is quite likely the biggest single financial transaction that you’ll ever make in your life, it’s important to make the right choice.

1. Going to your bank

For some people, it’s natural to go straight to the bank because that’s what you know and trust and it’s probably what your parents did.

But this can be a mistake. There are dozens of lenders out there who may be offering better deals, and your bank may take advantage of you not shopping around due to your misplaced loyalty to them.

If you have established a good credit history and a steady income, chances are that you’ll still be able to get a good interest rate through a bank. What they can’t and won’t do though is tell you if there is a better deal available elsewhere.

2. Going it alone

You can jump online and start doing loan comparisons yourself. Be aware though, that there are differences in criteria, so it’s not altogether straightforward and online calculators will have built-in assumptions.

You will need to have a good understanding of the industry and a good grip on the terminology.

You’ll also need to understand the implications of loan terms, fixed interest and variable interest options, interest only vs principal and interest, mortgage protection insurance, credit history, and employee vs self-employed status.

Finally, you’ll need to consider redraw options and offset accounts. That’s a lot to weigh up in a short amount of time – especially if you need to source finance quickly.

3. Using a broker

Having a home loan broker is like having a personal shopper who will research and compare hundreds of available market options in search of the best deal for you. We’re also required to hold or operate under an Australian Credit Licence.

A broker will have access to multiple lenders and multiple products, will be able to compare and recommend suitable loan options, negotiate the loan on your behalf, and guide you through from application to settlement.

We also don’t cost any extra. That’s because we’re paid a commission by the lender. Rest assured though, that we’re driven to secure the best possible home loan deal for you.

After all, having you tell family and friends at your house warming party about how we secured you a great home loan is much more valuable to us than slight variations in commissions.

The choice is yours

Any of these three options will get you there, but choosing a mortgage broker like us is likely the best way to be fully informed before you commit to a loan.

We’re happy to answer any questions you have, any time, meaning you don’t have to trawl through pages upon pages of Google to find the correct answer.

It’s also the most stress free way of getting your finance lined up in time, so that the home of your dreams doesn’t get snatched up by someone else!

If you’d like to know more about how we can secure a great home loan for you, get in touch today.

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Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

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